The two banks that are said to have pushed up their credit card interest rates recently are Halifax and Bank of Scotland. Officials have expressed concern that whilst the Bank of England has been slashing the base interest rate over the past six months, bringing it down to an all time low of just 0.5 percent, some credit card firms have continued to hike up their interest rates dramatically.

The two groups are owned by HBOS, which has now been taken over by Lloyds TSB. The provider has said that the rate rises are between 1 and 4 percent. However, some of the credit card customers have received letters stating that their card interest rate is being increased by 5 percent. Some customers have even seen their rates increased by more than this amount. The card provider has said, however, that the move is part of a ‘continual review of rates’.

An official from HBOS said: “The changes will affect a small number of our card holders and will be according to each customer’s personal circumstances. The average increase is between 1% and 4% which is inside [government] guidelines and reflects what is happening across the credit card market.”

Credit Card Rates Hiked By Two Major Providers is a post from: Credit Cards Bureau

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The bank has already taken billions of pounds in taxpayer’s money as part of a bailout package, and the outrage that this letter has caused has resulted in pressure for some senior officials at the banking giant to resign. Officials have called for the financial services secretary, Lord Myners, to step in and handle the situation.

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Philip Hammond, Tory shadow chief secretary to the Treasury, said: ‘It beggars belief that a bank so heavily reliant on public funds is promoting itself as a provider of credit for gambling habits. Taxpayers who are on the hook for a bail-out worth billions of pounds will be horrified. This is grossly irresponsible behaviour and Lord Myners needs to put a stop to it at once.’

Vince Cable, deputy leader of the Liberal Democrats, added: ‘The senior management who signed this off need to be fired. It’s quite extraordinary that a publicly owned company is effectively encouraging borrowers to gamble on their credit cards. It is exactly the type of stupid, irresponsible behaviour that has to be stopped. What makes this even more breathtaking is High Street banks such as Lloyds TSB are refusing to lend money to well-run businesses and borrowers with good credit histories.’

Lloyds TSB attacked over credit card gambling is a post from: Credit Cards Bureau

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